MAS eyes more efficient way to settle cross-border payments

The Monetary Authority of Singapore is looking at using distributed ledger technology in settlements for bond trading and cross-border payments.
The Monetary Authority of Singapore is looking at using distributed ledger technology in settlements for bond trading and cross-border payments.PHOTO: ST FILE

The Monetary Authority of Singapore (MAS) is looking at using distributed ledger technology (DLT) - better known as blockchain technology - in settlements for bond trading and cross-border payments. The central bank plans to test the technology in the bond trading and settlement cycle to make the process more efficient, in a project to be driven by the Singapore Exchange.

It will also focus on new methods to conduct cross-border payments using central-bank digital currency.

The MAS added in a statement yesterday that it is in the early stages of discussions to develop links from Singapore to other countries using DLT to allow cross-border payments to be settled directly via central-bank accounts.

This follows the successful conclusion of its proof-of-concept project to conduct domestic inter-bank payments using DLT.

The project was done in partnership with DLT company R3 and a consortium of financial institutions. It has achieved the objectives of producing a digital representation of the Singapore dollar for interbank settlement; testing methods of connecting bank systems to DLT; and making the MAS Electronic Payment System inter-operate with DLT for automated collateral management, noted the MAS.

Mr Sopnendu Mohanty, chief fintech officer at MAS, said the interbank payments project demonstrates the commitment of both the MAS and the industry to co-create uses for technologies such as DLT. He added: "Already, some institutions have embarked on projects that are inspired by this collaboration."

Correction note: In an earlier version of the story, we misstated the name of R3. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on March 10, 2017, with the headline 'MAS eyes more efficient way to settle cross-border payments'. Print Edition | Subscribe